The loan scheme targets farmers who are not members of cooperatives or nonagrarian reform beneficiaries (non-ARBs) as exclusive eligible borrowers, based on ACPC Resolution 3 approved late last year.
The seemingly discriminatory measure was actually to allow marginalized farmers who cannot access the agrarian productivity credit program jointly administered by the DA, Department of Agrarian Reform and the Land Bank of the Philippines (LandBank) which is only for ARBs.
The loan program will cater to non-palay farmers who are the beneficiaries of the “Sikat Saka” (farm shine) program, another loan-assistance program of the agriculture department.
The fund was split into two government financing institutions, P550 million went to the LandBank and the remaining P450 million to the People’s Credit and Finance Corporation (PCFC), the ACPC said on Friday.
Under the General Appropriation Act of 2013, a P1-billion fund was set aside for the “establishment of a flexible credit facility for the benefit of small farmers listed in the Registry System of Basic Sectors in Agriculture as an alternative to the rigid and stringent credit facilities usually provided by banks.”
“But if we really want to stimulate inclusive growth, this fund [P 1 billion] is not enough, and this will only cover small number of farmers and fisherfolk in the targeted 20 provinces,” LandBank President Gilda E. Pico said.
According to ACPC Executive Director Jovita M. Corpuz, this early, their estimate for the amount of AFFP to be really of service to marginalized small farmers, both within the 20 poorest provinces initially identified and other provinces, is equivalent to P1.9 billion, “thus, for 2015, we are going to ask for P2 billion additional funding for the program.”
Under the program, the LandBank will directly release funds to eligible farmers while the PCFC will use other small financing conduits, such as cooperatives. This is to encourage cooperatives and other similar rural-based organizations to assist farmers who are not members of any cooperative and other organization.
In terms of production area, farmers can loan amount enough to cover five hectares as maximum, while in terms of amount, the ceiling was up to P300,000. The loan scheme is open to any livestock and agricultural products, except palay.
The loan is payable after every crop or production cycle, with 1.5 interest a month, or 15 percent per annum.
The 20 provinces initially identified to be covered by the program were Abra, Agusan del Sur, Apayao, Camarines Sur, Davao Oriental, Eastern Samar, Ifugao, Kalinga, Masbate and Mountain Province.
Also included were North Cotabato, Northern Samar, Romblon, Saranggani, Siquijor, Sultan Kudarat, Surigao del Norte, Surigao del Sur, Western Samar and Zamboanga del Norte.